Lotte Chemical Titan posts slightly lower net profit in Q2

MOSCOW (MRC) -- Lotte Chemical Titan posted a lower second-quarter net profit on a year-on-year basis due to lower selling prices of products, but the number represented a sharp reversal of first-quarter losses, said Bernama.

The lower profit was dampened by continuation of operating margin compression as a result from the lower average selling prices (ASP) year-on-year, it said.

“The fall in product ASPs was mainly due to heightened economic uncertainties following the outbreak of the COVID-19 pandemic which has disrupted global business activities and weakened overall manufacturing demand in 2020,” the olefins and polyolefins producer said in a statement today.

LOTTE said its revenue fell 25.9 per cent to RM1.58 billion during the reviewed month from RM2.13 billion previously, owing to a decrease in average product selling price.

The company said demand was weak in early Q2 20 as regional countries continued to impose lockdowns and restrictions in their attempts to curb the COVID-19 pandemic.

However, following the gradual easing of restriction to spur economic activity from May 2020, the group managed to increase its sales volume by 1.4 per cent compared to Q2 2019, it said.

President and chief executive officer Dr Lee Dong Woo said the improving business outlook would be dependent on the global economic recovery pace.

“Moving forward, our company will continue to focus on operational and financial performance optimisation initiatives.

“We will also be undertaking a strategic review on the timing and progress for our LOTTE chemical Indonesia new ethylene (LINE) project in light of the pandemic impact on the global economy,” he said.

Notwithstanding the external environment, Lee said the company would continue to maintain its strong financial resilience with its net cash position of more than RM3.8 billion, as well as optimise its operations to ride through the highly volatile business environment.

As MRC informed earlier, Lotte Chemical has delayed the restart of its fire-hit naphtha-fed steam cracker in Daesan for the second time to mid-November, from October. It had initially planned to restart the cracker in September.

We remind that Lotte Chemical shut down its Deasan cracker for maintenance turnaround on October 14, 2019. The cracker resumed production on November 10, 2019.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Lotte Chemical runs two naphtha crackers in South Korea. One cracker is located in Daesan county in Seosan which can produce 1.1 million tonnes per year of ethylene with the other 1.2 million tonnes per year cracker in the
MRC

MOSCOW (MRC) -- Leading tank storage player Vopak (Rotterdam, Netherlands) has reported net profit including exceptional items of EUR116 million (USD137 million) for the second quarter of 2020, a rise of over EUR10 million year on year (YOY), despite a 7% decline in sales to EUR292 million, said Chemweek.

Group operating profit (EBIT) including exceptional items increased EUR9 million YOY to €163 million for the quarter, and was up over EUR37 million on the first quarter of this year. Excluding exceptional items, net profit was EUR83 million, down over EUR6 million on the prior-year period, while EBIT fell EUR7 million YOY to slightly below EUR130 million.

The company says the proportional occupancy rate at its tank terminals was 90% for the quarter, an improvement of 6% over the prior-year period and also up 4% on the first quarter of 2020, with a “good performance” from its joint venture (JV) oil terminals and the continued strong performance of its JV gas and industrial terminals.

COVID-19 continues to have a limited impact on the company’s operations, with all 66 of its terminals operational, Vopak says. Operational and financial performance, cash flows, and its financial position “have not been significantly affected,” although the timing of the execution of some of its growth projects has been affected by generic local lockdown measures in various countries, it says.

Vopak recognized a EUR33 million exceptional gain in the second quarter for the remaining consideration relating to the divestment in December last year of its 49% equity share in the joint venture Vopak SDIC Yangpu terminal in Hainan, China, with EUR16.3 million of this amount expected to be received in the second half of 2020, it adds.

The company implemented cost control measures totaling EUR295 million during the first half of 2020 in response to the pandemic’s impact, and says it is now aiming for about EUR600 million for the full year. It will also continue to invest in growing its terminal portfolio worldwide, saying growth investment for 2020 “could amount up to EUR500 million."

“We captured opportunities in our oil storage portfolio, resulting in improved occupancy rates. At the same time, we experienced reduced throughput for chemicals, in particular in Houston and Singapore,” says Eelco Hoekstra, Vopak’s CEO. “Relative to our original plan, we missed some contributions due to delays in growth projects and out-of-service capacity as construction work was restricted in the second quarter. The value of these growth projects are not affected,” he says.

Vopak’s worldwide storage capacity at the end of the second quarter was 34.4 million cubic meters, down from a year earlier but up slightly on the first quarter of 2020, reflecting divestments in the first half of 2020 of 3.6 million cu meters and new capacity of 1.1 million cu meters.

As MRC informed earlier, Royal Dutch Shell, Royal Vopak NV and Greenergy Ltd. said Monday that they completed the acquisition of the Coryton refinery in England, which was previously owned bankrupt oil refiner Petroplus Holdings AG. The transaction follows the earlier announcement by the consortium on 26 June 2012. The three companies plan to develop and invest in this facility - to be named Thames Oil Port - to create a state-of-the-art import and distribution terminal for oil products to be managed by Vopak.

We remind that Royal Dutch Shell Plc plans to idle a sulfur recovery unit (SRU) at the joint-venture Deer Park, Texas, refinery in 2021, said Shell spokesman Curtis Smith in July 2020. Currently, the refinery is operating at about 75% of its 318,000 barrel-per-day capacity because of reduced demand due to the COVID-19 pandemic.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) -- Angarsk Polymers Plant has resumed its low density polyethylene (LDPE) production after a scheduled turnaround, according to ICIS-MRC Price Report.

The plant's customers said Angarsk Polymers Plant brought on-stream its LDPE production on 31 July after the scheduled maintenance. The outage started on 22 June and lasted for more than one month. The plant's annual production capacity is about 75,000 tonnes.

As reported earlier, Gazprom neftekhim Salavat intends to resume its LDPE production in the next few days after shutdown for a turnaround. The outage began on 1 July. The plant's annual production capacity is 45,000 tonnes.

It is also worth noting that three producers simultaneously intend to shut their production capacities for a turnaround in late August-September: Ufaorgsintez (shutdown in two phases, the first one - in late August), Tomskneftekhim (for two weeks from 2 September) and Kazanorgsintez (shutdown n two phases from 17 September to 13 October).

Angarsk Polymer Plant (controlled by Rosneft through OOO Neft-Aktiv) is the only petrochemical full-cycle plant in Eastern Siberia. The bulk of the produced ethylene is used by the plant for the production of LDPE, styrene monomer (SM) and polystyrene (PS). Straight-run gasoline and hydrocarbon gases, mainly produced by OAO Angarskaya NHK, are the feedstocks for the plant.
MRC

MOSCOW (MRC) -- Sabic said that its polycarbonate manufacturing facility at Cartagena, Spain, is set to become the world’s first large-scale chemical production site to be run entirely on renewable power, following the signing of a major agreement, said Chemweek.

The deal will see Iberdrola, one of the world’s biggest electricity utility companies, invest almost EUR70 million (USD82.3 million) to construct a 100 MW solar PV facility with 263,000 panels, on land owned by Sabic, making it the largest industrial renewable power plant in Europe. The plant is expected to be fully operational in 2024.

The 25-year deal represents another milestone in Sabic’s journey to transition all its global operations to cleaner energy. Sabic’s ambition is to have 4 GW of either wind or solar energy installed for its sites globally by 2025, rising to 12 GW by 2030. In 2019, solar panels were installed at Sabic sites in India and Thailand, helping reduce greenhouse emissions by 200 metric tons, and Sabic’s Home of Innovation at Riyadh, Saudi Arabia has been completely solar powered since 2015.

Bob Maughon, executive vice president/sustainability, technology & innovation and CTO and CSO at SABIC, said, “This ground-breaking deal with Iberdrola is a significant step towards achieving our long-term sustainability and clean energy targets…The solar PV powered plant in Cartagena demonstrates that Sabic continues to drive the sustainability agenda in the chemicals industry and that a transition on such a large scale is possible.

“In recent years, the many breakthroughs in renewable energy technology have made deployment at this kind of scale possible…The new PV plant will deliver an 80,000 metric tons annual reduction in indirect CO2 emissions, and furthers strengthens our support and contribution to wider climate change initiatives like EU 2030 and our alignment with the UN Sustainable Development Goals.”

Once the solar plant comes online, Sabic’s customers, including those in the automotive and construction sectors, will have access to polycarbonate produced with 100% renewable power, further responding to customer and consumer demands for more sustainable solutions in an increasingly carbon-neutral world.

Plans are also underway to install PV technology at Sabic’s global HQ in Riyadh, and a final-stage feasibility study with Marafiq and the Royal Commission for Jubail and Yanbu is underway to explore a $300 million, 300-megawatt solar array project on the western coast of Saudi Arabia. Once complete, Sabic will take the electricity generated by the plant and deliver it to local chemicals manufacturing plants.

According to MRC's ScanPlast report, Russia's estimated PC consumption (excluding imports and exports to/from Belarus) rose in January-May 2020 by 19% year on year to 38,900 tonnes (32,700 tonnes a year earlier).

Saudi Basic Industries Corporation (Sabic) ranks among the world"s top petrochemical companies. The company is among the world"s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC

MOSCOW (MRC) -- BASF’s Coatings (BASF) division and Jaguar Land Rover's (JLR) global headquarters have signed a cooperation agreement with Glasurit and R-M, premium refinish paint brands of BASF, to support the development and implementation of JLR’s Global Body & Paint Programme covering 16 importer countries and markets in Asia Pacific, said the company.

Under the agreement, the partners will commit to a long-term strategic collaboration that enables them to exceed the industry standard in vehicle body repair and paint refinish. The partnership includes the supply of refinish products and color-matching solutions. Additionally, a dedicated Regional Body & Paint Manager has been appointed to help develop and implement JLR’s Global Body & Paint Programme in the region.

BASF will work closely with JLR to ensure the total branded paint solutions meet their stringent repair specifications and process standards, supported from a global support network that offers guaranteed methods and expertise. In addition to Glasurit and R-M paint solutions, RODIM®’s user-friendly accessories for painters are included to ensure highest quality and an efficient damage repair process.

As part of the total offer, BASF is also providing comprehensive Advanced Business Solutions (ABS) that help JLR drive profitability and efficiency within its network of authorized body shops and appointed retailers. This includes a set of innovative services, tools, training, and performance management modules designed to improve the processes and overall performance of JLR’s authorized body shop facilities.

"Jaguar Land Rover and BASF are committed to helping their business partners to develop, this year more than ever before given the challenges we are currently facing together,” explained Mike Hill, Global Strategic Account Management, BASF Automotive Refinish Coatings Solutions Europe. “The Global Body & Paint Programme offers a balanced approach, taking care first and foremost of body shop business infrastructure, for example, in facility planning, tooling, and technical compliance. Glasurit and R-M experts, together with the JLR Programme Manager, will support body shops to be more profitable through our unique ABS, tailored to improve JLR’s body shop operations and grow commercial opportunities."

Thanks to the innovative partnership, JLR and BASF ensure a uniformly high international standard across JLR’s authorized body shop network around the world. As such, the guaranteed repair quality through the most efficient processes helps deliver the highest standards of customer service.

"Last year in March, BASF signed the same agreement with JLR for region Europe. This latest agreement has expanded our global footprint and shows the continued trust and commitment to growing the partnership. JLR is also utilizing the latest technologies from Glasurit and R-M to drive growth,” said Hill. “There have been some great examples of teams from JLR and BASF working closely to develop the authorized body shop networks in Europe and identifying high quality repairers that not only meet the high standards and expectations of a premium brand, but also address the geographical challenges. Italy is a very good example as we have seen an increase of over 30% in its authorized network."

As MRC reported earlier, BASF Total's cracker in Port Arthur, Texas, is undergoing maintenance and expected to restart on 23 July, 2020, according to the company's statement in a filing with Texas Commission on Environmental Quality (TCEQ). An unexpected outage occurred at BASF Total Petrochemical’s joint-venture (JV) olefins unit at Port Arthur, Texas, on Thursday afternoon, 11 June, 2020. The cause of the outage is being investigated, with a compressor shutdown cited as a possible factor, according to TCEQ filing. The JV’s steam cracker at Port Arthur has a production capacity of more than 1 million metric tons/year of ethylene and 544,000 metric tons/year of propylene, according to IHS Markit data.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries. BASF generated sales of EUR59 billion in 2019.
MRC